UPDATE 1-EU capitals OK interim duty on Chinese paper-sources

BRUSSELS, Nov 12 (Reuters) - European capitals have approved interim import duties on Chinese glossy paper, which the EU says is being dumped on European markets, EU diplomats said on Friday. Plans for antidumping duties of up to 39.1 percent on coated fine paper were passed by "a comfortable majority" during a meeting this week of EU trade officials and national government representatives, one diplomat said. Indonesian paper giant Asia Pulp and Paper (APP), which exports paper to Europe from China through two subsidiaries, will be the only company to be granted a lower rate, of 19.7 percent, diplomats told Reuters. The tariffs must be launched by Nov. 17, under EU law. But trade officials at the meeting would not be drawn on whether the European Commission will seek to impose further duties by mid-January, in a parallel investigation into Chinese subsidies for the paper industry, diplomats said. Those duties must launch in Jan. 2011, under EU law. The subsidy investigation, with serious political implications, is Europe's first against China. EU trade chief Karel De Gucht said this week that China subsidises "nearly everything" and that the EU will increasingly target Chinese state assistance, fanning tensions with Beijing. Coated fine paper is used mainly for coffee-table books and glossy brochures. Complaints lodged early this year by EU papermakers, led by the European operations of South Africa's Sappi, prompted the Commission to start the two investigations. (Reporting by Juliane von Reppert-Bismarck, Editing by Rex Merrifield and Noah Barkin) Keywords: EU TRADE/PAPER (juliane.vonreppert@thomsonreuters.com; Tel: +32 2 287 6875; Reuters Messaging: juliane.vonreppert.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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